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Temperature Overshoot

Trading Term

Temperature overshoot describes a trajectory in which global temperature exceeds a stated limit for some period before declining back below it, typically through later net removal of carbon dioxide from the atmosphere. The concept has become central to climate policy discussion as it has grown less plausible that warming can be held under 1.5°C without any exceedance. For contract purposes the distinction matters, since a market on when a threshold is first crossed at the annual timescale answers a different question than one on whether a long-term average limit is ultimately respected.

Fair Value Weather & Climate — Thursday, July 30, 2026

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